Rapid scale up of clean energy risks environmental impacts that will offset emission benefits and undermines decarbonization goals

Serpell, et. al, 21 --- a research associate at the Kleinman Center for Energy Policy (May 2021, Oscar Serpell, Benjamin Paren - a Ph.D. student in the department of Materials Science and Engineering at the University of Pennsylvania, Wan-Yi Chu - assistant professor at Mills College in Oakland, California and a former postdoctoral researcher in the Goldberg Group, located in the Department of Chemistry at the University of Pennsylvania, “RARE EARTH ELEMENTS: A RESOURCE CONSTRAINT OF THE ENERGY TRANSITION,” https://kleinmanenergy.upenn.edu/wp-content/uploads/2021/05/KCEP-Rare-Earth-Elements.pdf, JMP))

POLICY SOLUTIONS

As we look to the future of clean energy and the role of rare earth elements in decarbonization, we are faced with a difficult tradeoff. REEs such as dysprosium and neodymium offer an effective way to improve the efficiency and performance of crucial clean energy technologies. However, the production of these elements is environmentally and economically costly.

Global prices have remained relatively affordable in recent years only because of China’s lax environmental regulations and illegal mining operations. But China is now reckoning with the true costs of toxic, acidic, and radioactive run-off and leaching.

If demand for REEs continues to grow as expected, the pressure on nations to increase domestic production at the expense of the environment will increase. For example, there is growing interest in expanding U.S. production of REEs beyond Mountain Pass (Garcia and Smith 2020).

Failure to avoid an increase in environmental impacts from larger-scale production would jeopardize the sustainability of renewable energy technologies utilizing REEs and could partially offset their emissions benefits. This would in many ways undermine the goals of decarbonization and would further stress ecosystems and communities that have already been affected by climate change.

In order to assure that the transition to carbon-free energy minimizes environmental costs and promotes global sustainability, policy support for clean energy solutions should be coupled with streamlined environmental regulation and sustainability incentives. Fundamentally, all human development carries environmental impacts.

In the case of rare earth elements, policies intended to encourage the production and sale of wind turbines and electric vehicles should be designed in a way that encourages continued innovation in sustainable motor designs and REE recycling. These policies should also be coupled with environmental regulations and incentives to ensure REEs are secured in a sustainable and relatively benign way.

This policy plan is subtly distinct from a policy that might be designed with the sole intention of encouraging the rapid adoption of EVs and wind turbines. Such a policy would simply incentivize producers to employ the best and most efficient technologies—in this case, REE magnet motors and generators. It would then be up to the market to signal an increase in production of REEs to meet this demand, and an inevitable tension would arise between resource supply, affordability, and environmental sustainability.

By coupling technology adoption incentives with demand management policies and environmental regulations, policymakers can optimize the speed and sustainability of the transition to clean energy by addressing these competing environmental priorities upfront.

In addition to tax incentives, permit streamlining, and carbon pricing for wind energy and electric vehicles, a sustainable suite of REE policies would include increased environmental regulations for mining. These regulations would in turn control the supply of REEs and consequently promote innovation in magnets using underutilized REEs or smaller quantities of REEs altogether.